In the US and Other OECD Nations, 20% of Health-Care Expenditures is Wasted

01/15/2017

In some way or another, about 20 cents of every dollar spent on health care in OECD countries is wasted, a new OECD report released Jan. 10 reveals this shocking truth. In the United States, more than 20 percent of total health expenditure is represented by that waste.

a meeting for OECD Ministers of Health in Paris on Jan. 16–17 will discuss the findings of the report, entitled "Tackling Wasteful Spending on Health."

Especially at a time when public budgets are under pressure worldwide, it is alarming that around one-fifth of health expenditure makes no or minimal contribution to good health outcomes, according to the report's author, Agnès Couffinhal, a senior OECD health economist.

"Governments could spend 20 percent less on health care and still improve patients' health." With as much as 9 percent of GDP spent on health-care systems across the OECD — 6.75 percent of which is by federal governments — this savings could mean a lot,” she explains.

The report reveals that the health sector is considered to be corrupt or even extremely corrupt by a third of OECD citizens. Unnecessarily harmed at the point of care are 1 in 10 patients in OECD countries and correcting preventable medical mistakes, or infections that people catch in hospitals accounts for more than 10 percent of hospital expenditures, the report shows. The report also reveals that despite medical indications suggesting that C-section rates should be 15 percent at most, 1 in 3 babies are delivered by Caesarean section.

"Sustainable progress toward better value from health care can only be achieved if health-care providers are on board and encourage local patient-safety initiatives."-Agnès Couffinhal, senior OECD health economist

"Efforts to increase the use of generics are now being hampered by regulatory obstacles," Couffinhal noted.

The report says that in many OECD countries, corruption is another issue plaguing the health-care systems. Ranked in the bottom third of corrupt institutions is the health sector in OECD countries. Greece, Slovakia and Italy are the countries ranked with the most corrupt systems.

While 10 percent of medical frauds are committed by consumers in the U.S., approximately 70 percent of health-care fraud is committed by medical providers, in the country that is ranked in ninth place.

According to the report, Norway is a country that is a good model for best practices. There, patients are required to be informed about the possibility of cheaper generic alternatives by the pharmacists. Local authorities and hospitals that delay discharging patients from hospitals also are imposed financial sanctions in that country. Longer stays in hospital, for older patients in particular, can lead to worse health outcomes and can increase their long-term care needs.

By encouraging patient-provider conversations about whether certain treatments add value, the Choosing Wisely campaign, initiated by clinicians, aims to reduce low-value care on the United States. "Sustainable progress toward better value from health care can only be achieved if health-care providers are on board and encourage local patient-safety initiatives," Couffinhal said.

While Some 19 countries, including France, Israel, Korea, Poland and Chile, are using a health technology assessment to help determine the value of new treatment options, Nearly half are actively promoting greater use of generic drugs as all OECD countries are seeking to tackle this problem.